An Examination of Taxation Issues in China’s New Energy Vehicle Sector: International Experience and Optimization Pathways

DOI

10.2991/978-94-6239-825-2_41How to use a DOI?

Keywords

New energy vehicles; automotive taxation system; full life cycle; tax fairness; R&D incentives

Abstract

Since the 18th National Congress of the Communist Party of China, China’s tax regime for new energy vehicles has undergone a systematic transformation—shifting from “isolated incentive mechanisms” to “end-to-end supply chain coordination” and from a “scale-oriented approach” to a “quality-driven approach”—and has gradually established a theoretical framework grounded in the deepening of Pigouvian tax theory, gradual tax neutrality, and full-lifecycle tax governance. However, the current tax regime still faces several challenges: a structural imbalance characterized by “emphasizing purchase over usage,” insufficient long-term sustainability and precision in R&D incentive mechanisms, misalignment between central and local fiscal and taxation allocation mechanisms, and a lack of tax fairness between new energy vehicles and conventional fuel-powered vehicles in areas such as transportation infrastructure utilization, environmental compensation, and market competition. Building upon an examination of the evolutionary trajectory and theoretical innovations in China’s new energy vehicle tax regime, this paper conducts a comparative analysis of the international experiences of Germany and Japan in providing tax incentives for new energy vehicles. It then proposes systematic recommendations for improving China’s new energy vehicle tax regime across five dimensions: constructing a tax system that ensures full-lifecycle tax burden equilibrium; enhancing the sustainability and precision of R&D incentive mechanisms; restructuring the fiscal and taxation allocation and governance mechanisms to foster central-local coordination; recalibrating the tax burden disparity adjustment mechanism between new energy vehicles and conventional fuel-powered vehicles; and adapting international tax regime experiences to the domestic context. These recommendations aim to drive the evolution of China’s tax system toward greater scientific rigor, systematic integration, and long-term sustainability, thereby supporting the achievement of the “Dual Carbon” goals and fostering high-quality industrial development.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Bowen Liu
PY  - 2026
DA  - 2026/11/10
TI  - An Examination of Taxation Issues in China’s New Energy Vehicle Sector: International Experience and Optimization Pathways
BT  - Proceedings of the 2026 5th International Conference on Public Service, Economic Management and Sustainable Development (PESD 2026)
PB  - Atlantis Press
SP  - 412
EP  - 432
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-825-2_41
DO  - 10.2991/978-94-6239-825-2_41
ID  - Liu2026
ER  -